Abstract: In the context of investment － driven growth in China，and based on the“capital －skill complementarity”nature of the production process，the paper makes a theoretical modeling and empirical analysis of the mechanism of manufacturing upgrades from the perspective of human capital accelerating technological diffusion，expanding the channel of manufacturing upgrading mechanism． Theoretical modeling takes the optimal behaviors of manufacturer and family into Nelson and Phelps technological diffusion models． The conclusions show that the skill premium caused by“capital － skill complementarity”improves the fact that human capital is the key for technological diffusion to promote manufacturing upgrading． Empirical analysis is made to test the theoretical model by using the provincial panel data from 2001 to 2016，and the results show that technological diffusion significantly promotes manufacturing upgrading，among which human capital plays the intermediary role． Skill premium can significantly improve the human capital level of manufacturing industry． The promotion of technological diffusion on manufacturing upgrading has regional heterogeneity，and structural changes have taken place in 2010．

Key words: Capital － skill Complementary; Skill Premium; Technology Diffusion; Manufacturing Upgrading